The Dutch retailer, which in its first two years of operations on the Romanian market opened seven stores, is accelerating its expansion rate and tightening competition on the fashion segment, the same year when Sweden’s H&M entered the market. So, after opening a store in the Family Center shopping center in Botosani, C&A plans to open nine more by the end of the year.
“The first store we will open this fall, on September 1, will be in Sibiu. It will be followed by openings in cities like Suceava, Focsani, Constanta, Timisoara and Craiova,” says Cristian Codrea, C&A Romania district manager.
The retailer, which entered the Romanian market in the spring of 2009, is operating stores in Arad, Cluj-Napoca, Baia Mare, Botosani, Bucharest and Buzau. All of its current stores are located in shopping centers and malls.
“We open stores based on possibilities but so far in Romania we have not had the opportunity to open a free-standing store,” says Codrea, who cites the example of future stores in Constanta and Craiova, which will be opened in the Maritimo and Electroputere shopping centers.
He did not go into detail about the value of investments in expansion, but they are comparatively low when measured against investments in food stores, i.e. they amount to several hundred thousand euros, considering that most stores are rented and the money is spent on inventories and equipment.
C&A’s decision to expand this year comes as consumer spending continues to decline by over 5%, a trend which started two years ago. However, the fashion market increased by 5% to 10% in the first six months of this year, and could grow at a similar rate in the second half of 2011, according to estimates of companies in the sector and of market research company Euromonitor.
C&A Moda Retail posted turnover of around RON33.2 million (around EUR7.8 million) and a net profit of around RON125,000 (EUR29,000) in 2009, meaning an average of EUR2.6 million per store, considering that no store had been open for more than eight months at the time. So, according to ZF estimates, with seven operating stores in 2010, the company could post revenues of between EUR22 million and EUR27 million. The company’s results for 2010 has not been published on the Finance Ministry’s website. (EUR1=RON4.2611)
(English version by Daniela Stoican; Editing by Loredana Fratila-Cristescu)